According to a news release from the district, the early projections show the budget deficit is $1 million, and if school taxes are raised to the state allowed index of 2.8 percent, the deficit falls to $115,000 without the use of district savings.

A favorable 2012-13 audit with revenue exceeding expectations and expenditures below budget indicate an improved financial outlook for the district for next year, the district reported.

Since the summer, a newly formed long-term budget planning committee recommended for the 2014-15 school year to maintain the status quo for staff, buildings and academic programming.
For next year, the district will seek to partner with an alternative education center for offering building space at the district's annex center in exchange for tuition savings, the district reported.

In addition, the district was awarded a large grant for distribution over the next four year called the Safe School/Healthy Children grant.

The budget forecast for the 2015-16 and 2016-17 does show that the rising employer cost to retirement and health insurance could mean future tax increases, use of fund balance and/or expenditure cuts over the coming years, the district reported.

There will be discussion at that meeting about whether to recommend filing a tax resolution limiting tax increases to 2.8 percent next year or filing a preliminary budget.

Previously reported: It is going to take nearly two decades for Northeastern School District to pay off its $114 million debt, and board members dove deeper into a conversation Thursday about its three-year projected budget forecast, with debt and deficit taking center stage.

Director of Operations Brian Geller has suggested to board members to entertain the idea of joining Delaware Valley Regional Financing Authority as a way to lower annual debt payments. The district is currently paying $5.6 million.

The authority loan is otherwise known as a "swap." The risk-sharing pool provides school districts a loan with a variable rate.
Swaps, which began in 2003 under Act 23, are a contract between bond issuer and the investment bank to exchange cash flows during an agreed-upon term based on other securities or indices. When the two sets of cash flows are exchanged, the side that generates the larger payments receives the difference between the sums.

The school board continued its discussion on entering into an agreement with the authority. No votes were taken on the matter.

The district would pay $80,000 up front to join. Geller said he calculated the district would save ballpark $300,000 in the first year. He said if interest rates increase, the district could get out.

The 2014-15 expected budget shortfall is $1,024,750. Spending is increasing $1,782,447 from 2013-14. The current school district millage rate is 24.92 mills. That means the owner of a $100,000 house paid $2,492 in school district taxes in 2013-14. Northeastern, under Act 1, can raise its local taxes .69 mills in 2014-15 to 25.61 mills. Raising local taxes to its allowed maximum, it would reduce the deficit to $115,423. It would still not balance the budget.

Lloyd Douglass, a school district resident, approached the school board from a revenue perspective. He said the board needs to be proactive and lure businesses to the community.

"You're talking cost, not revenues," he said. "We need to meet with township supervisors, talk to people who own property "" attract people to the district"¦the General Assembly is going in the wrong direction. I'm not putting any more faith in Harrisburg. I really think we need some kind of committee, if we can encourage more people to come in here. Concrete and blacktop, that's what you've got to do."

PRNewswire contributed to this story

Correction: Lloyd Douglass' first name was incorrect in an earlier version of this story.